What is important in this statement? The word “need” because that word has to be put on a balancing scale.

Last month we talked about the “Five C’s” of lending: Character, Cash Flow, Collateral, Capitalization, and Conditions. A business owner should know these and if they are wise, they access the services of a good CPA or business advisor, minimally, to discuss a plan to fulfill these categories. Applying for a loan then becomes a ‘shoe in’ vs. a crap shoot.

Another suggestion: Sit down with a commercial loan officer at a bank and ask them, “What do I need to do to get myself bankable?” Nine times out of ten I ask business owners approaching me for help, “Did you discuss what you need to do to qualify for the loan?” the same answer rings loud and clear: “No. They just turned me down.”

My friends: How does one fix something if you don’t take the time to find out what is broken? Please know too that some things are just obvious (i.e. you’re losing money or your sales are just plain drying up, etc.). These are no brainers. However, it’s not always a no brainer situation.

That said: Have this conversation! A loan officer wants you to build a working relationship with their bank, rather than seeing you leave. It’s ‘FREE’ and it’s right from the horse’s mouth so take advantage of it.

Your best option? Know why you are being turned down and if you can find someone to direct you to the right source, do it. If you don’t then I can promise you that you are in for nothing but frustration and the loss of the one thing you cannot replace: Time. If you get caught in this loop then hope that you don’t run out of money!

Although we hear of successes coming about, “…because I talked to the wrong bank first,” the number of people that don’t get financed far out numbers those that do. So, be smart and talk with the professionals available to you.

His return call prompted us to meet with his bank and showing the bank that we could sustain the banks collateral protection, pay down the credit line, and allow this business to fulfill its contracts the bank became all ears. From this conversation we set up what is known as an “Inter Creditor Agreement” with the bank.

In this agreement the bank kept their existing collateral, which backed and ensured the loan, and allowed us to collateralize ONLY the new contract invoices to allow the business to cash flow and fulfill the contracts. As a part of this we set up an agreement where a calculated percentage of what we funded went to paying down the credit line which continuously improved the bank’s position and let the business grow. The result? The business is taking on more contracts … aggressively … and not selling off equity in their company.

If you’d like more information on this contact me at ebrown@finance-manager.com and again we’d love to invite you to provide us your comments via your own blog!

(If you know of someone that overcame similar issues please share situations that you might know of with a blog of your own!)

With his only asset being a piece of raw land, we created a working capital line of credit against the property. He also fulfilled the contract on time and without missing any deadlines.

What made this complicated? Who would lend on raw land when nearly no one was building?

Considered a ‘hard money loan’, this loan was placed in a first position lien/UCC1 on the property and was completed in a rather short amount of time. The important part was the contractor had access to the funds he needed to buy materials and meet payroll through to his first draws from the State … and the timing worked well!

Working with the contractor, we reviewed his contracts and history of fulfillment, establishing a comfort level that allowed us to move forward. With our services, he was able to do what he needed on time while paying the money back without issue.

If you have questions about Hard Money contact me directly @ ebrown@finance-manager.com or feel free to enter your own blog here as we would love to hear your comments!

The most basic ways to bill for services is either through an invoice or accounts receivable. Did you know that you can get paid in 24 to 48 hours instead of waiting 30 to 45 days or more to receive payment?

Other income streams exist in all sorts of forms, including business notes, mortgage notes, lotteries, annuities, structured settlements, and others.

Do your homework! Make sure that you understand the effect of deciding to sell off an income stream; the highest payout may be the most costly in the end! 

Hard money loans almost always apply to commercial property, and allow advances typically up to 70% of the property value to be made available to the borrower. These loans can close in days rather in weeks or months.

How can hard money help you? Hard money has been used to buy property, capitalize projects, pay off pressing notes and obligations, and mobilize companies.